Ethiopia opens its banking industry for foreign investors

As reported by Ethiopian Monitor

Summary

• Ethiopia's parliament has approved a new banking law that allows foreign banks to operate in the country, ending decades of restrictions on foreign participation in the banking sector.
• The legislation permits foreign banks to enter the Ethiopian market through three pathways: establishing wholly-owned subsidiaries, opening branches of their international operations, or acquiring minority stakes in existing local banks.
• The move is a centerpiece of Prime Minister Abiy Ahmed's broader economic liberalization agenda, which has already seen reforms in telecommunications, the exchange rate, and other sectors.
• The reform is expected to attract international banks seeking to tap into Ethiopia's large population and growing economy, while bringing capital, technology, and competition to a sector historically dominated by state-owned and domestic private banks.
• The Commercial Bank of Ethiopia (CBE) remains the dominant player, but the entry of foreign banks could gradually reshape the competitive landscape.
• BirrValue review: CBE, Awash, Dashen, and other local banks still set today's rates. Compare on BirrValue before sending—foreign entry is phased and will take time to affect FX availability.